A loan modification can help you stop foreclosure proceedings. First let’s discuss whether you are eligible for a loan modification or a HARP loan modification. If you had a reduction in your income but you are still employed a mortgage lender will consider a loan modification. If you’re unemployed most mortgage lenders will most likely not approve a loan modification. In any event you should always apply for a loan modification. Loan modifications take months for a mortgage lender to approve.. The job market is improving and you might just find a job during the process of the loan modification. Additionally, the lender will not proceed with the sheriff sale provided you are completing all of the necessary paperwork in a timely manner. Some of the documents they will need are past tax returns, last couple of months banks statements, copies of payroll stubs etc. Most lenders will provide all the information necessary for a loan modification on their website.
It can be very frustrating to get a loan modification processed. Many times the lenders will ask for information repeatedly. Please be patient and follow up with your lender regularly to make sure they’ve received your documents. Keep very good notes on when you contacted the lender and to whom you’ve spoke with. If you find you’re not getting anywhere contact me I may be able to help.
Once the loan modification has been approved you must make your payments on time. If you’re late even one time you will be right back where you were when you started the loan modification process. This is non-negotiable with most, if not all lenders.
If your loan modification has been denied or you’re unable to manage your newly modified payments the next step is to sell your house as a short sale to stop foreclosure proceedings. Click here for more information on short sales.